The American consumer is turning into a self-conscious, active, geopolitical and strategic actor on the world stage. This appears through its new and very negative attitude towards purchasing “made in China” goods (Brendan Murray, “Americans give the Made-in-China the cold shoulder”, Bloomberg, 17 May 2020).

Towards the great decoupling?

As it happens, for the last forty years, the deindustrialization of America was “compensated” by massive imports from China (Martin Jacques, When China Rules the World, 2012). This generated the abysmal U.S. trade deficit with China. However, the cheapness of the Chinese products is too a major factor of the U.S. consumption. Thus it is also a major factor of the U.S. economic growth (Niall Ferguson, Xiang Xu, “Making Chimerica Great again”, Wiley one line Library, 21 December 2018).

Considering, reciprocally, the mammoth importance of the relationship with the U.S. for China’s growth, this emerging American anti-China’s products consuming trend is nothing but world scale geopolitics. It is so because it appears as a signal, among many others, of a powerful dynamic: an American tendency towards decoupling its economy from the Chinese economy.

From trade war to consumers war?

A recent survey unveiled that more than 40% Americans declare that they would not purchase Chinese goods. Only 25% Americans declare they wouldn’t care. However, 35% say that “they wouldn’t like it, but that they would ultimately purchase it” (Brendan Murray, “Americans give the Made-in-China the cold shoulder”, Bloomberg, 17 May 2020). 

Towards the anti-“made in China”?

According to Bloomberg, this anti-China consumerist trend establishes that 78% Americans would be ready to pay higher prices for products if their producer would move from China. The poll also reveals that 66% people are in favour of stricter import restrictions on Chinese products, as a way to support the U.S. economy. Finally, 55% declare that they don’t trust China to follow up on the January trade deal with the U.S..

This poll is particularly interesting given the current context of gigantic unemployment in the U.S. triggered by the Covid-19 pandemic (Jean-Michel Valantin, “The U.S-China Covid-19 competition (2) : America and Chimerica in crisis”, The Red (Team) Analysis, May 15, 2020). As it happens, since mid-March, almost 40 millions Americans are unemployed. During the first quarter of 2020, the U.S. GDP shrank by an annualized 5%. It is the worse drop since the 2008 crisis, knowing that the perspectives of the Covid-19 shock are worse.

Self-sacrificing consumers?

We have to keep in mind that, in the U.S, consuming habits, as well as health insurance, mortgage payment and retirement pensions all depend completely on jobs. It is so because there are few public safety net. It is in this context of rapidly degrading economic situation and of deep financial insecurity that 40% of American consumers declare themselves ready to pay higher prices in order not to purchase “made in China” goods.

In other words, the U.S. consumer declares itself ready to join the ranks of the trade war. And s/he does so by sacrificing some of his or her already diminishing purchasing power. This consuming trend’s shift in progress becomes a new dynamic within the “trade war” that opposes the U.S. and China since 2018. Indeed, the U.S Government links the trade war with the reindustrialization of the United States.

Indeed, a new American purchasing behaviour would directly strike at the financial returns towards China. This is already happening, because almost 300 billion dollars of Chinese goods are already under higher taxation. It would also strike at the Chinese supply side of the trade relation with the U.S.. Thus, it would impact the Chinese industrial output. Meanwhile, the latter is already contracting at a historic rate, as a consequence of the Covid-19 lockdown (Helene Lavoix, “The emergence of a Covid-19 International Order”, The Red (Team) Analysis Society, June 15, 2020).

Tearing apart Chimerica

President Donald Trump is strongly promoting this anti-China policy and sentiment. He made official the political and strategic dimension of that stance on 26 May 2020, as the White House report “United States Strategic Approach to the People’s Republic of China” was released.

This report states that the Trump administration has “adopted a competitive approach to the PRC, based on a clear-eyed assessment of the CCP’s {Chinese Communist Party’s} intentions and actions, a reappraisal of the United States’ many strategic advantages and shortfalls, and a tolerance of greater bilateral friction.”

From Trade war to the People’s (consumer) war

The connection of the trade war and of the anti-China consuming trend to this U.S. China’s grand strategy creates a strong political consensus. This consensus permeates the very fabric of the U.S. growth, as well as of the daily life of U.S. citizens. Thus, this is a deeply felt situation, by families as well as by the government. In other terms, a large part of the U.S citizenry is actively sharing the anti-China grand strategy.

This is a major geo-economic and geopolitical shift. This U.S.-China relationship is such an intricate and powerful structure that the British historian Niall Ferguson dubs it “Chimerica”. This expression translates the quasi-hybridation between these two mammoth national economies (Niall Ferguson, Xiang Xu, “Making Chimerica Great again”, Wiley one line Library, 21 December 2018).

Chimerica on the brink

This process emerged from the installation of thousands of U.S. industries and corporations in China in the 1980s. It created the template for the mammoth trade relations between the two countries. In the same time, China buys huge amounts of the U.S. debt by purchasing Treasury bonds. In February 2020, China possessed USD 1,097 trillion of Treasury securities (Adam Tooze, Crashed, How a decade of financial crises changed the world, 2019 and Jeffery Martin, “China economy has worst quarter in 40 years after Coronavirus lockdowns, leading the world into recession”, Newsweek, 4-17-20).

So, it clearly appears that the U.S. politics regarding China, such as the trade war or the stance on Taïwan and Hong Kong, are signalling a powerful political intent. This intent appears to be a will to butcher “Chimerica”, in order to decouple the two super powers.

National interest and all out geo-economic warfare

In this context, the Covid-19 pandemic and its humongous economic consequences appear as an opportunity for the new Trump strategy. Indeed, it is an accelerating factor of this “great decoupling” strategy. Beyond the nickname of the “Covid-19” virus as the “Wuhan virus”, Washington is escalating the trade war.

This happens even if both the U.S .and Chinese economies are struggling with the Covid-19 shock. In the same dynamic, Beijing exerts retaliations. Since 2018, it diminishes its U.S. agricultural imports, while forcefully increasing its imports of Brazilian agricultural products (Emiko Tearzono, Sun Yun, “China’s record Brazilian soyabean imports impede U.S trade target”, Financial Times, 14 May 2020).

Mimetic decoupling?

This move expresses the way Beijing tries to implement another form of exterior dependency. It tries to decouples China from the U.S. agricultural production. In other terms, the “trade war” might be triggering the same policies in both Washington and Beijing. Those policies aim at drastically reducing the U.S.-China “Chimerican” mutual dependency.

Towards a dangerous near future?

However, this begs the question of the economic near term future of the U.S. agriculture. This sector is already hammered by climate change and by the trade war. In China, a food supply crisis in a time of Covid-19 and African swine flu pandemic could trigger food insecurity (Hélène Lavoix, “Covid-19 and food insecurity early warning”, The Red (Team) Analysis Society, May 18, 2020).

Those issues are all the more pressing that if the cooperative Chimerica is broken apart, strategic competition is going to be all the more ferocious. This could be especially true in the Asia-Pacific region.


Featured image: Henrikas Mackevicius de Pixabay 

About the author: Dr Jean-Michel Valantin (PhD Paris)

Dr Jean-Michel Valantin (PhD Paris) leads the Environment and Security Department of The Red (Team) Analysis Society. He is specialised in strategic studies and defense sociology with a focus on environmental geostrategy. He is the author of "Menace climatique sur l’ordre mondial" (Climatic threat on the world order), "Ecologie et gouvernance mondiale" (Ecology and world governance), "Guerre et Nature, l’Amérique prépare la guerre du climat, "(War and nature: America gets ready for climate war) and of "Hollywood, the Pentagon and Washington".

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2 Comments

  1. When the US federal covid-19 unemployment compensation benefits for the 30+ million unemployed Americans runs out, some by 31 July ’20, along with the mortgage payment forbearance for 4.2 million home mortgages totaling US$1 trillion and the layoffs by the end of September 2020 in the tens of thousands of employees in corporations that received federal aid begin, take the same survey again. I’ll bet the results change.

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